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Avatron Software, the developer of the popular Air Sharing HD app that allows you to store, print, and share documents on your iPad, now has another app that will turn your iPad into an additional external display for your Mac. This new app, Air Display, became available today in the App Store and costs $9.99.

At 9.7 inches with a resolution of 1024 x 768 pixels, the iPad isn’t exactly enormous for use as a computer display, but the extra screen real estate could be very valuable, particularly for those using a laptop. Air Display works with Macs only (requiring OS 10.6 Snow Leopard) at the moment though Avatron has promised that a Windows version of the companion desktop application is coming soon.

Note that both your Mac and your iPad must be on the same Wi-Fi network. The companion desktop app that’s needed for the app to work is free and weighs in at a scant 2.1 MB and can be downloaded from Avatron’s site here. It does require a re-start to install it, so be prepared to stop everything you’re doing for a moment to get it up and running. Once it’s installed, turn it on and open the app on your iPad. Then, select your iPad in the task bar menu on your Mac.

You use the Displays preferences menu in Mac OS X to select where your iPad’s display should appear relative to your main display. Air Display also gets its own pane in Systems Preferences as well.

You’re not restricted to using your computer’s mouse to navigate the display on the iPad – you can use its multi-touch display to click links and buttons. To enter text, you’ll need to use your computer’s keyboard since the iPad’s virtual keyboard won’t pop up when you get to a text field.

We found the app to be quite usable, though dragging windows results in some fragmenting and delay, but these disappear once the window is stationary. Watching YouTube videos in Safari on the iPad works relatively well, though video is a little choppy and there is a small noticeable lag between video and audio.

Avatron recommends using the iPad’s display for utility applications and inspector windows to keep your main display uncluttered and we think Air Display will be perfect for this kind of usage. For $9.99, Air Display offers a downright dirt-cheap and highly portable alternative over buying an actual LCD display, particularly if your external display needs aren’t demanding. Air Display is one app that’s going to stay on our iPads.